Bond yield makeover

Message to readers: I have a large backlog of reader suggestions. Please be patient as I slowly get through them. The frequency of posts will remain lower for the time being as I am busy finalizing a draft of a book. More on that in the near future.

Matt H, a reader, sent in the following entry (with minor edits).

I saw a couple of bad charts on money.cnn.com and thought I'd submit them to you.

They're both part of the same
feature on investment bargains caused by the recession.

It seems to me like both charts would have made their points more
eloquently by using a much simpler, more common form, like a bar
chart.

In Chart A, cubes are used to display the difference between
treasury bond yields and AAA municipal bond yields at the two-year
horizon and the ten-year horizon. The volume of each cube corresponds
to the yield for the given type of bond in the given period (I think),
which spreads the one dimension being compared (yields) across three
dimensions, making the differences look smaller than they really are. [...] At the two-year horizon, the two yields being compared are 1.16% for
Treasury bonds and 3.01% for AAA municipal bonds. The yield for AAA
municipal bonds in this case is more than 2.5 times larger than the
yield for Treasury bonds, but the difference doesn't look nearly that
big in the chart provided. [...]

Time out. Let me add that the inadvertent reference to an optical illusion concerning foreground and background! The "outline only" cube on the left should have approximately the same volume as the "solid red" cube on the right (3.01% versus 3.30%) and yet the red cube appeared quite a bit larger because our eyes reacted to the solid color more than thin outlines.

Matt continued:

In Chart B, [...] Again, the
metric in question is bond yields: ten-year Treasury bond yields
compared to investment-grade corporate bond yields. The 2008 figure
for each is shown alongside the five-year average. This chart uses the
area of a circle to express these yields, spreading the one-dimensional
value across two dimensions. As in Chart A, the result is a chart in
which the difference between values does not appear as large as it
actually is.

I will also send
a simple bar chart version of each chart -- the bar charts should illustrate the differences in yields more effectively than the charts actually used in this article.

These are his revised charts:

We can do even better to convert the chart on the right to a time-seriesline chart. Instead of the five-year average, it is better to display the gap beween treasury and corporate bonds for each of the five years plus 2008. This should make for a more eye-catching graphic.